the LFPR, UR and ER. Provide a demographic justification for the projections. 5. You are given the following information from history of the U.S. economy. Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 One Year Bond CPI Interest Rate 179.8 2.0% 184.0 1.24% 1 188.9 1.89% 195.2 3.62% 201. 6 4 .93% 1207.3 4.52% 215. 31 1.82% 214.5 0.47% 218.1 0.32% 224.9 0.18% The Consumer Price Index is for December of each year. The one-year bond interest rate covers January 1 through December 31 of each year. a. Calculate the real one-year bond interest rate for each of the years 2003 through 2011. b. What was the best year among those to be saver? Why? c. Suppose that you bought a one-year bond for $10,000 on Jan 1, 2002. Given that the nominal interest rate was 2% in 2002, when you were repaid your principal (the $10,000) and interest at the end of 2002, how much money would you have had? d. Now suppose you took the interest and principal you had at the end of 2002 and used it all to purchase one-year bonds for 2003. Then, suppose you repeated this action for every year through 2011, how much money would you have had at the end of 2011 in nominal terms? e. In "real or inflation adjusted terms (using 2002 dollars), what was the value of your money on Dec 31, 2011? What are the economic implications of your answer? f. In what year was the real value of your money the largest? Explain